(Recasts)
* U.S., Europe sanctions against China hit shares
* Powell to testify from 1600 GMT on U.S. recovery
* Oil slides 4% amid demand fears
* Global currencies vs. dollar https://tmsnrt.rs/2PmYOcE
By Lawrence White and Alun John
LONDON/HONG KONG, March 23 (Reuters) - Oil prices slumped
and shares slipped from a one-year peak on Tuesday as a wave of
coronavirus infections, a fresh lockdown in Germany, and U.S.
and European sanctions over China combined to curb risk appetite
worldwide.
Brent crude futures dropped by $2.59, or 4%, to
$62.03 a barrel by 1225 GMT and U.S. West Texas Intermediate
(WTI) crude futures likewise slid 4% on concerns that new
pandemic curbs and slow vaccine rollouts in Europe will hold
back a recovery in demand.
Energy stocks were also hit, with Chevron Corp,
Occidental Petroleum Corp and Exxon Mobil Corp
shedding between 1.5% and 3.5% pre-market, while travel-related
stocks also fell as much as 4%.
The STOXX index of 600 European shares slipped
0.4%, while the benchmark 10-year German government bond yield
dropped 4 basis points to -0.351%, its lowest in a
week, and gold inched up as investors sought safer assets.
U.S. stock index futures slid ahead of Congressional
testimony by Federal Reserve Chair Jerome Powell and Treasury
Secretary Janet Yellen later in the day that may shed light on
the pace of economic rebound from the COVID-19 pandemic.
In remarks prepared for delivery to the hearing on Tuesday
morning, Powell said the U.S. economic recovery had progressed
"more quickly than generally expected".
The congressional hearings begin at 12 p.m. ET (1600 GMT).
"The FOMC last week laid out pretty clearly what the Fed's
view is with regard to rates ... the next thing that markets
will focus on is maybe getting some details from Yellen with
regard to further infrastructure investment," said Alex Wolf,
head of investment strategy for Asia at J.P. Morgan Private
Bank, referring to a statement from the Federal Open Market
Committee.
MIXED MOOD
A mixed bag of new Western sanctions on China, coronavirus
concerns and Turkish tumult after President Tayyip Erdogan's
shock sacking of the central bank chief at the weekend left
investors awaiting a firmer signal.
The Turkish lira appeared to find a floor after
Monday's historic 7.5% slump, rising as much as 1% in volatile
trading to 7.8742 against the dollar by 1234 GMT.
In Asia, MSCI's broadest index of Asia-Pacific shares
outside Japan dropped 0.66%, hurt by a 0.95%
fall in Chinese blue chips as a fresh wave of U.S. and
European sanctions over human rights abuses in Xinjiang hit.
The sanctions on China prompted an immediate riposte from
Beijing against the EU that appeared broader, including European
lawmakers, diplomats, institutes and families.
Adding to market jitters were further worries over the
efficacy of the AstraZeneca Plc vaccine developed with
Oxford University after a U.S. health agency said the drugmaker
may have included outdated information in its data.
SUMMER CANCELLED?
The fall in oil prices, travel and energy-related stocks was
spearheaded by news Germany had extended its lockdown until
April 18, reversing plans for a gradual reopening of the economy
agreed earlier this month.
"Global travel is still looking like it could be a while
away," said Matt Stanley, a fuel broker at Star Fuels in Dubai,
adding that a second-half recovery in oil demand looked doubtful
as lockdowns remain the order of the day.
Benchmark 10-year U.S. Treasury notes last
yielded 1.6523%, down from 1.732% late on Friday.
The dollar gained slightly against a basket of six major
currencies, last trading at 92.1, having slipped 0.32% on
Monday, while making advances against the kiwi, Aussie and
sterling.
Spot gold rose slightly to $1,740 per ounce by 1239
GMT, buoyed by easing U.S. Treasury yields.
The New Zealand dollar hit a three-month low after
the government introduced taxes to curb housing speculation, a
move investors reckoned could allow the central bank to hold low
interest rates for longer with less risk of a property bubble.
(Reporting by Alun John in Hong Kong, Chris Prentice in
Washington, Lawrence White in London; Additional reporting by
Luoyan Liu in Shanghai; Editing by Catherine Evans)
Astrazeneca (AZN)
